Hollywood studios, RealNetworks sue over DVD ripper

MUMBAI: Six major Hollywood studios, which are members of the Motion Picture Association of America (MPAA), have filed a lawsuit asking a federal court to stop RealNetworks Inc. from distributing the company’s RealDVD software, which allows movies to be copied illegally. In response to the lawsuit, RealNetworks has counter-filed a suit against Hollywood studios to protect consumers’ fair-use rights With RealDVD.

In their complaint and motion for a temporary restraining order, the studios said that RealNetworks’ RealDVD violates the Digital Millennium Copyright Act (DMCA) because its software illegally bypasses the copyright protection built into DVDs that protect movies against theft.

"RealNetworks’ RealDVD should be called StealDVD. RealNetworks knows its product violates the law and undermines the hard-won trust that has been growing between America’s movie makers and the technology community. The major motion picture studios have been making major investments in technologies that allow people to access entertainment in a variety of new and legal ways. This includes online video-on-demand, download-to-own, as well as legitimate digital copies for storage and use on computers and portable devices that are increasingly being made available on or with DVDs. Our industry will continue on this path because it gives consumers greater choices than ever. However, we will vigorously defend our right to stop companies from bringing products to market that mislead consumers and clearly violate the law," said Motion Picture Association of America (MPAA) executive vice president and general counsel Greg Goeckner.

The Content Scramble System (CSS) built into DVDs prevents the unauthorized reproduction and distribution of copyrighted material released in DVD format. The RealDVD software illegally circumvents this copyright protection system. Among other things, the RealDVD software enables users to engage in an illegal practice known as "rent, rip and return," whereby a person rents a DVD from a legitimate business like Blockbuster or Netflix, uses the RealDVD software to make multiple permanent illegal copies of the movie, and returns the DVD, only to rent another popular title and make permanent copies of it, repeating the cycle of theft over and over again without ever making a purchase. On its own Web site, RealNetworks acknowledges that this behavior is illegal and that its software could be used in that manner.

Motion pictures and television programs require substantial investments of money, time, effort and creativity by hundreds or often thousands of people, which must be recouped through many individual exhibitions, sales and broadcasts of the works. DVD sales are a major source of revenues that enable the studios to invest in and develop the wide range of entertainment options available to consumers. The RealDVD software would enable massive theft of creative content that would have a direct, negative impact on the delivery of movies, television shows and other entertainment to consumers through the home entertainment and digital distribution markets.

The lawsuit, filed today in US District Court in Los Angeles asks for damages and injunctive relief against RealNetworks Inc. for violations of the DMCA’s circumvention provisions. The DMCA prohibits the manufacturing or trafficking of any technology or product, service or device that is designed for the purpose of circumventing measures that effectively protect copyrighted titles. In manufacturing and selling RealDVD, RealNetworks Inc., a CSS licensee, has attempted to leverage its license improperly by making a product that permits users to circumvent the protections of CSS. Such a product was never intended to be authorized by the CSS license. The worldwide motion picture industry, including foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators lose more than $18 billion annually as a result of movie theft. More than $7 billion in losses are attributed to illegal Internet distributions, while $11 billion is the result of illegal copying and bootlegging.

In a statement, RealNetworks said, "In response to threats made by the major movie studios, RealNetworks this morning plans to file an action for a declaratory judgment against DVD Copy Control Association, Inc., Disney Enterprises, Inc., Paramount Pictures Corp., Sony Pictures Entertainment, Inc., Twentieth Century Fox Film Corp., NBC Universal, Inc., Warner Bros. Entertainment, Inc., and Viacom, Inc., in the United States District Court for the Northern District of California. The lawsuit asks the court to rule that RealNetworks Home Entertainment, Inc.’s RealDVD software, made available to consumers today at http://www.realdvd.com, fully complies with the DVD Copy Control Association’s license agreement.

"RealDVD allows consumers to securely store, manage and play their DVDs on their computers. It does not enable users to distribute copies of their DVDs. RealDVD not only maintains the DVD’s native CSS encryption intact, it also adds another layer of digital rights management encryption that effectively locks the DVD copy to the owner’s computer to ensure that the content can not be improperly copied or shared. RealDVD provides consumers with a great solution for the playback and management of their DVD collections while adding security that is more robust than CSS," the statement added.

RealNetworks took this legal action to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs. The DVD CCA, which represents numerous parties including all of the major studios, previously sued another company – Kaleidescape – over the same issues. The trial court ruled against the DVD CCA and allowed the distribution of a product similar to RealDVD. Having lost the case once, the major studios are now trying to get a different result by going to a different court.

"We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases. For nearly 15 years RealNetworks has created innovative products that are fully legal, great for consumers, and respectful of the legitimate interests of content creators and rights holders. RealDVD follows in that tradition. We expect to successfully defend our right to make RealDVD available to consumers and consumers’ rights to use it," RealNetworks’ statement added.